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The Silk Road, Bitcoins and the Global Prohibition Regime on the International Trade in Illicit Drugs: Can This Storm Be Weathered?

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The Silk Road, Bitcoins and the Global Prohibition Regime on the International Trade in Illicit Drugs: Can This Storm Be Weathered? The Silk Road, Bitcoins and the Global Prohibition Regime on the International Trade in Illicit Drugs: Can this Storm Be Weathered? Reza Raeesi Abstract: This paper examines the effects of the Silk Road on the global prohibition regime on the international trade in illicit drugs. Situating the FBI’s effort in shutting down the online illicit drugs black market, it is argued that The Silk Road represents a fundamental challenge to this global prohibition regime. The paper will look at how this challenge is shaped through the technological difficulties the complexities of The Silk Road has dealt law enforcement agencies and legislative bodies looking to regulate and expand this prohibition regime in the virtual world. It is also argued that the approach taken by law enforcement efforts in this regard is problematic and doomed to fail. Lastly, this paper looks at controlled samples of social media reactions to gage public response to this phenomenon in order to explain the lack of clear moral opprobrium against this type of criminal activity. Résumé : Cet essai examine les effets de la plateforme Silk Road sur le régime de prohibition globale du commerce international de drogues illicites. Localisant les efforts du FBI visant à fermer le marché noir en ligne de drogues, on reconnaît que Silk Road représente un défi fondamental au régime de prohibition globale. Cet essai explore ensuite les manières dont la technologie a façonné les tactiques et stratégies utilisées par les organismes d’application de la loi et les organes législatifs cherchant à réguler et à combattre ce monde illicite virtuel. Plus spécifiquement, on illustre la problématique de l’approche transparaissant des efforts d’application de la loi à cet égard, argumentant ainsi qu’elle soit vouée à l’échec. Enfin, cet essai analyse des échantillons contrôlés des réactions sur les médias sociaux afin de mesurer la réponse du public à ce phénomène et d’expliquer le manque d’opprobre moral clair contre ce type d’activité criminelle. 2 The global prohibition regime on the international trade in illicit drugs is a relatively recent phenomenon. This regime finds its origins in the early twentieth century and is a part of the broader system of international norms and regulations arising from American hegemony and is historically without precedent. Conversely, the historical Silk Road traversed much of the ancient known world and connected civilizations through trade for centuries. Merchants from across the world travelled safely, for the most part, on this road and took part in a vibrant globalized trade. Centuries later, a new Silk Road was allegedly created by 29 year-old Mr. Ross William Ulbricht, the self-styled Dread Pirate Roberts.1 The Silk Road relevant to this discussion is a web page that cannot be accessed through routine means. This black market trading in illicit drugs is placed within the Dark Web, in a deeper layer of the Internet than the one accessed through regular URLs used by majority of the websites. During its two-and- a-half year run, the “E-bay of illicit drugs”2 facilitated more than $1 billion in transactions, according to the FBI.3 Utilizing the crypto-currency Bitcoin, it protected all financial transactions from the watchful eye of the anti-money laundering checks and balances. It also utilized Tor, an Internet browser ironically created by the US government, which can grant access to the Dark Web. I set out to analyse how such technological advances challenge law enforcement. To do so I will answer the ‘why’ and ‘how’; Firstly why there is a potential within such technology to present a challenge and secondly, how is law enforcement confronted and responding. Since this response to the drug trade is the centerpiece of the global prohibition regime on the international trade in illicit drugs, any attempt to analyze the law enforcement’s responses to such phenomenon must include a critique of this regime as well. 1 Alex Konrad, "Feds Say They've Arrested 'Dread Pirate Roberts,' Shut Down His Black Market 'The Silk Road'," Forbes, http://www.forbes.com/sites/alexkonrad/2013/10/02/feds-shut-down-silk-road-owner-known-as- dread-pirate-roberts-arrested/. 2 Joshua Kopstein, "How Ebay of Illegal Drugs Came Undone," http://www.newyorker.com/online/blogs/elements/2013/10/fbi-silk-road-ross-ulbricht-allegations-arrest.html. 3 Konrad, "Feds Say They've Arrested 'Dread Pirate Roberts,' Shut Down His Black Market 'The Silk Road'". 3 I will argue that the modern Silk Road and similar apparatus have placed unrivalled pressure on the regime’s underpinnings. I will attempt this analysis in two steps. Firstly, I will develop the context and background of the subject and a review of the literature. Secondly, I will present relevant conceptual tools such as anti-sovereignty4 in Dark Web, nomadic capitalism and criminal business5, the uniqueness of The Silk Road in limiting possible demand focused law enforcement efforts, and the global regime of prohibition of international trade in illicit drugs.6 I will also survey Twitter in an attempt to gauge cultural trends in responses to The Silk Road and another similar case and consequently analyse the findings. Relying on these, I will attempt to build a case outlining the ways in which technologically intricate tools such as The Silk Road and Bitcoin present tremendous challenges to the enforcement arms of this global regime. Background The Silk Road, Tor and Dark Web The simplest way to explain The Silk Road to the uninitiated would be to say that it is the e- Bay of illicit drugs. To understand The Silk Road, however, one must look to the technological platforms it utilizes. The Silk Road is inaccessible to anyone not using the Tor browser and relying on conventional software. Tor was created by the Swedish and American governments in a US Naval research laboratory and eventually released in 2001.7 It was created primarily for privacy of communication and leaves no trace of virtual activity. It has important legitimate uses such as inter-governmental and classified communication as well as providing safe communication channels to non-governmental organizations and their staff in 4 Ronen Palan, "Crime and the global political economy," ed. H Richard Friman (Lynne Rienner Publishers, 2009), 35-62. 5 R. Palan, The Offshore World: Sovereign Markets, Virtual Places, and Nomad Millionaires (Cornell University Press, 2006). 133. 6 Frank Madsen, Transnational organized crime, vol. 34 (Taylor & Francis, 2009). 12-36. 7 Tor Project, "Uses for Tor," Tor Project, https://www.torproject.org/about/torusers.html.en. 4 high-risk situations.8 Tor differs from conventional browsers in its transmission methods. Every Tor user becomes a “node” in the network and traffic is bounced through at least three such nodes before reaching its destination. When the browser of a prospective buyer attempts to contact The Silk Road server, these nodes set up a virtual meeting point within the Tor network so that the two parties can communicate while keeping IP addresses and digital footprints hidden from third parties as well as anyone involved. The Silk Road is only one of such websites being used to perpetuate illicit activity. This part of the internet is commonly known as the Dark Web, a phrase that refers to content that is not accessible or indexed by search engines like Google.9 An important part of the Dark Web is the “Hidden Wiki”, a Wikipedia type webpage that has a collection of links to the websites active in the Dark Web. The Silk Road is only one of the vendors in this market; links on the “Hidden Wiki” include avenues for child pornography, murder for hire, counterfeit money and other illicit websites.10 The Dark Web is indeed a dark place. Though in all fairness, The Silk Road’s seller’s guide clearly mentions: “Do not list anything who's purpose is to harm or defraud, such as stolen items or info, stolen credit cards, counterfeit currency, personal info, assassinations, and weapons of any kind. Do not list anything related to pedophilia.” The guide also outlines a detailed description of an expectation of a high standard in customer service.11 Although Tor and the Dark Web have been subject to NSA, FBI and United States Secret Service enforcement efforts and heavy monitoring12, Tor has continually provided 8 Ibid. 9 Alex Wright, "Exploring a 'deep Web' that Google can't grasp," New York Times 23 (2009). 10 This has drawn reactions from the “hacktivist” group Anonymous. In 2011, they took down the objectionable website as part of Anonymous’ Operation Dark net, an anti-child-pornography effort aimed at thwarting child pornographers operating on the Tor network. http://arstechnica.com/business/2011/10/anonymous-takes-down- darknet-child-porn-site-on-tor-network/ 11 Andy Greenberg, "Collected Quotations Of The Dread Pirate Roberts, Founder Of Underground Drug Site Silk Road And Radical Libertarian," Forbes, http://www.forbes.com/sites/andygreenberg/2013/04/29/collected- quotations-of-the-dread-pirate-roberts-founder-of-the-drug-site-silk-road-and-radical-libertarian/3/. 12 Committe on Homeland Security and Governmental Affairs, Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies, 18th November 2013 2013. 5 exceptional anonymity . “More brazen than anything else by light-years” is how U.S. Senator Charles Schumer characterized The Silk Road when it first hit the US legislators’ radar.13 This sense of security has been key for The Silk Road users who, assured by these intricate tools, were part of a thriving illicit market until the FBI succeeded in shutting down the website for one month14 following the arrest of the man behind it all.
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